The government may have left no stone unturned to promote a less-cash, digital economy, but the latest data from RBI indicates that it would take much more than just new apps and m-wallets to change habits. While cashless transactions had become common during demonetisation, as people had little alternative, with RBI bringing back currency notes into the economy, digital transactions are climbing down. In fact, data for January released by the central bank shows that digital transactions fell 7% to R96,794 billion from R1,04,055 billion a month ago. The fall was much stark with volumes coming down 10% from 957.5 billion to 858.1 billion. In terms of debit card and credit card PoS transactions, volumes declined 19%, while in value terms there was a 12% fall.
Despite the disappointing figures, all is not lost. New-age transactions, like UPI and USSD, more than doubled both in value and volume terms. But the rise hasn’t made up for the losses across other platforms, and the increase was almost half of what it was last month. While the government launching Aadhaar Pay would give some fillip to digital payments, given the ease of convenience attached to the service, it would have do so immediately to take advantage of the fact that the economy is not yet flush with cash. More than new apps, what the government needs is create general awareness regarding the new means and convince people to use them. A top-down approach via some policy measures may not work well.